Your macro/mkt prediction for 2022

[Dream of Freedom]

This is usually @ertyu's thread to start, but he has been gone since June. I think he was starting a new job in August. If you are out there ertyu we would like an update. I think this is a good tradition though so I hope you don't mind if I pick up the torch and run with it.

• Maybe some backward place like Califonia or New York will still be locked down but the rest of us are moving on

• Home prices continue to skyrocket despite interest rates rising (assuming interest rates indeed rise as for what the fed says. Though the home price is the prediction, not the interest change)

• Value will outperform growth in stocks.

• Small caps will outperform large caps

• Republicans will take both houses

• Wage growth will be higher than the ten-year average

• Recovery stocks such as hotels and casinos up well into the double digits above the overall market

[bostonimproper]

I did pretty badly on the previous iterations of these and am looking forward to doing so again this year.

• Republicans will take the House but Democrats will (very narrowly) keep the Senate.
• Joe Biden will announce that he is stepping down from office after 1 term.
• Crypto will continue to outperform equities from year start to year end.
• Inflation will continue to be pretty bad due to labor shortages and supply chain issues.
• Major power grid failures in the Northeast or Midwest (can’t let California and Texas have all the fun).

[Married2aSwabian]

These are always tricky, but here goes…

• The VIX / volatility will spike in Q1 with wild market swings in both directions

• A “taper tantrum” will force Powell to take a more dovish approach to monetary policy

• Inflation will therefore remain high, cutting into consumer spending

• Congress will remain narrowly divided With GOP controlling the House

• China will continue to advance it’s One-China policy regarding Taiwan with necessary military buildup and political posturing

• US Cold War and policy battles with China will accelerate

• US markets will be narrowly positive after a wild year

• Increasing / continued mistrust of US election process / system will continue the erosion of democracy

• As happened with the last pandemic 100 years ago, the Coronavirus will continue to mutate, with new variants becoming more contagious but increasingly less virulent.

• A TikTok video featuring puppy dogs, unicorns and rainbows will go viral and divert everyone’s attention away from the above problems for the balance of 2022

There you have it - Oz has spoken!

[Lemur]

Any mention of tickers and I'll put a stock price next to it.

• Semi-Conductors like AMD ($138), MU ($83), INTC ($50), and NVDA ($278) will all be priced higher by end of year. This industry will continue to grow due to chip demand that is required for AI, 5G, Electrical Vehicles, and Cloud. Demand will remain higher then what supply can handle pushing prices up. The government may even add subsidies. You can't go wrong with this investment. I'm especially bullish on MU and AMD. MU will be $150+. Heard it here first haha.

• Bank stock, Fin Tech, and other value stocks will start seeing some inflows. For instance, Visa ($214), Walmart ($139) should be higher by end of year

• Overall I believe tapering will be priced in and each Fed meeting you will have a sell-off but things will ultimately bounce back and S&P will be $5000+ by end of year.

• We will continue to see labor strikes - mostly online but the talk of "Great Resignation" will loom around and we might see some legislation for better working conditions but ultimately they will die in the Senate anyway.

• There will be some type of new variant that has the world shaken again.

• Bold prediction that I hope won't actually play out but if Russia invades Ukraine, then China will make moves on Taiwan at the same time knowing that the United States won't fight on two fronts. War hawks will campaign hard and Republicans will take House and Senate. I think Russia/China can take over those respective territories without firing a bullet though...

[canoe]

I'd love for people to add a rough estimation of how likely they think each of their predictions is (eg 60% if you think something is a bit more likely than not, or 90% if you think it's very likely). This would be useful for people reading the predictions as well as for everyone to better calibrate their levels of confidence (if that idea sounds interesting to anyone, also check out https://predictionbook.com/ and https://www.metaculus.com/questions/)

[WFJ]

2022 Predictions = Most 2022 predictions will not be true, in fact opposite is closer to consensus predictions. 2022 will be a Random Walk Year where what happened in 2021 will be the most accurate representation of what happens in 2002.

Market and other predictions for 2022

Rates = Low
Stocks = Overvalued and due for a crash, but grind higher despite gloom and doom 20% corrections predictions every day from Twitter blue checks
Crypto = "There's a sucker born every minute" P.T. Barnum will issue bearded lady coin in 2022
Powell = His country club dues have not gone up in years, so where's the inflation?
Zuckerberg = Will finally reveal his planet of origin and detail colonization plans (oddly similar to Metaverse ads)
Taxes = higher
There will be record lootings/crime/murders in big blue cities, stand your ground killings in red rural areas, some political party will gain seats, some political party will lose seats, but oddly conditions will remain constant for 99.5% of the population
Jacob = Will buy Mercedes-Benz AMG GT and a 10,000+sq ft luxury penthouse in Streeterville with ad revenue from ERE forum, national book tour and movie deal (staring Matt Damon as Jacob).

[thedollar]

2022 Predictions

• Cash is trash will continue to rule in 2022. Lots of cash currently on the sideline as well as huge stimulus will continue to inflate assets.
• BTC will hit $100,000
• Gold hits $2,000
• S&P500 hits 5,000 for the first time ever!
• TSLA hits $1,500
• Inflation goes back down to a level lower than 3% towards the end of the year
• The 3 rate hikes planned for 2023 are rolled back due to lower inflation
• Brent (oil) falls below $60/bbl as demand disappoints
• Corona is 'over' or not a significant problem by Dec-22 as almost everyone has already had it

[Seppia]

Inflation will sustain and oil will keep going up (little known fact: USO has done better than Bitcoin in 2021). I’m 70% confident in this one.

Cathie Wood’s funds will have another year of underperformance, in spite of TESLA again powering to even more implausible highs. 90% confident on the ARK part, less so on Tesla. When it will break, it will be ugly.

China and (to a lesser extent) most of Europe will NOT move on from covid. It’s too good of an opportunity for politicians to exert power through fear. 90% confident

[giskard]

Predictions:

- CPI Inflation averages above 5% the entire year of 2022, it starts to create long-term psychological changes in the way people consume (spending their entire paycheck immediately, etc).
- 2 rate hikes in 2022
- Gold finally does what it's supposed to and goes up during this period of negative real interest rates
- SPY has a minor -10% correction
- The executive branch administration struggles to handle the inflation situation and they enact price controls. They blame it on "greedy capitalists". This causes further shortages and supply chain disruptions.
- Geopolitically, tensions continue to be high. Something happens with Taiwan or Hong Kong before or after the olympics in Feb.
- Oil continues to go up but starts to moderate when the stock market correction happens. Average US gas price will be over $4 / gallon by end of 2022.
- Corona is mostly over, but there is some national/international health crisis. This time it's compounded due to a shortage of hospital workers.

[Humanofearth]

Pairs that will do well:
Eth/btc
Sol Luna Avax/eth
Atom/eth
Jewel/axs

M2 stays above 20%
S&P returns within 20% of m2 dilution, again
Gold keeps getting demonetized to btc as it has since its peak in 2011

[Lemur]

I think Russia/China can take over those respective territories without firing a bullet though...

Oof. And here I was thinking humanity has passed mass scale wars for some reason. Like we learned from history or something...But I had forgotten that for some people the Cold War never ended.

[chenda]

Oof. And here I was thinking humanity has passed mass scale wars for some reason. Like we learned from history or something...But I had forgotten that for some people the Cold War never ended.

Hehe, yeah I was certain he was bluffing too. Showing everyone he could not that he really would. @white belt you called it right.

Plague, war... I think famine is next. Well at least rising food and energy prices seem now inevitable. We'll be insulated to a large extent in the first world but its going to hit hard in Africa and parts of Asia. I expect trouble in South East Asia region particularly.

[Humanofearth]

I expect trouble in South East Asia region particularly.

What makes you think this?

I notice plenty of food, resources, 0 shortages or supply chain issues, development keeping along and life more comfortable than ever here.

Keep hearing about India’s development into a superpower and rising crime/inflation in the west.

I didn’t notice any price increases in 2 years except for oil.

Must admit that I doubt my prior predictions. Now, Bitcoin will reach ath again this year follow by a crash to above 40k. Eth/btc will hit .1-.15 if the merge happens. Most alts will keep dying into nothing.

[chenda]

What makes you think this?

Resource competition from large population, climate change issues, extreme inequality, refugees, political instability, huge environmental problems. Simultaneously life will continue to improve for lots of people too.

[Humanofearth]

Simultaneously life will continue to improve for lots of people too.

I simultaneously see many people happy here and some sick of it so I agree with this sentence.

Resource competition from large population:
Lots of rice here, literally 0 dying from hunger but obesity is prevalent.Oil price just increased but diesel is relatively cheap at .90usd a liter.

climate change issues:
I think you’re referring to Micronesia and rising sea levels, which I imagine is worsening. I could see how someone living outside may think this will lead to famine but again, tons of rice. And this rice is absolutely amazing. So soft, it’s almost like butter.

extreme inequality:
True anywhere. More inequality within than between countries now but the culture is one of gentleness and respect. Next to 0 violence or theft. My only experience of violence is having some trans girls try touching me while walking on the street, avoided that street after.

refugees:
From climate change or war?
I haven’t seen any. All the immigrants in the city are Russian or from the same country. I saw more economic immigrants from other countries in a different city years ago but less so now.

political instability:
Kingdoms seem to annoy their populace less than 51% democracies. I haven’t seen any of this but could happen. Don’t see this as leading to any problems though. Politics are such a small factor here, people seem aware that changing politicians won’t change anything.

huge environmental problems:
Leading to famine? Again, lots of rice. Cheap, easy to make things are in huge abundance.

To summarize your list, it seems famine and populace upset are your main factors. The rising obesity rate and extremely gentle population here mitigate these concerns for me. People have a live and let live attitude and often their own farm with a surplus, very independent yet relaxed.

There is one thing I have noticed: while the price of plates at restaurants remains around 1.3-1.6usd, the portion of meat and vegetables decreased while rice increased. Cheaper, easier to make in abundance, rationing of the harder to produce goods. Don’t see this leading to civil war or famine, more obesity actually as this is more empty calories.

[chenda]

To summarize your list, it seems famine and populace upset are your main factors. The rising obesity rate and extremely gentle population here mitigate these concerns for me. People have a live and let live attitude and often their own farm with a surplus, very independent yet relaxed.

To clarify I don't predict famine, just increasing food prices and shortages. Actually South Asia more than South East Asia might be more of a concern. Anyway, I hope you more positive prediction is correct.

[plantingtheseed]

2022-2025 will not be fun years for most.

Added:

We will need more understanding of the recent surge in the near 10% inflation and see if there is a solution. The calculus of the political will to enact the solution if there is one, will also come into play. Doing nothing and doing something, will both cause considerable pain for the masses.

A way to kick the can down the road with the least amount of pain will not work as effectively at this point.

We've been here before. This is likely to be a decade(s) long problem.

In addition, the high inflation in the US and in the rest of the world will accelerate China's pace to overtake the US as the world's leading economy. No doubt this will have an impact on what the recovery will look like, if we can get there.

[WFJ]

I'm in the Fed will do their job camp and will stabilize the USD. Are you sure China is going to overtake the US? This has been predicted for about 15 years now and further from happening after COVID than the last 5 years. China has a massive demographic problem coming and will thwart any China economic development over the US.

[Mister Imperceptible]

@plantingtheseed may not be back to answer, but it may not be possible to stabilize the USD without collapsing the US stock, bond, and real estate markets at this point.

The US debt to GDP ratio was recently above 130%. See: https://fred.stlouisfed.org/series/GFDEGDQ188S

The inflation of the past year in particular has brought that back under 130%, but besides evidence that robust economic growth cannot occur when sovereign debt exceeds 90% (see: https://scholar.harvard.edu/files/rogof ... bt_aer.pdf), it has also been shown that once government debt exceeds 130%, default is inevitable, if only a soft default through very high, compounding inflation/devaluation over a series of years (see: https://www.hcapital.llc/_files/ugd/dc7 ... 5bf39f.pdf). This is already in the central banker playbook, see: https://www.imf.org/external/np/seminar ... f/crbs.pdf

It would seem unlikely that US asset markets can be allowed to deflate, because without nominal asset appreciation, the US government would not receive enough taxes in capital gains to finance itself. See: https://m.youtube.com/watch?v=7Wo0g-Se2ls or https://m.youtube.com/watch?v=364NwXfmlec or https://m.youtube.com/watch?v=yNvF5SFDpNM

Additionally, the problems presented by $30T in US sovereign debt does not account for the $100T-$200T in off balance sheet liabilities like Social Security or Medicare, which, if added to the $30T would put the real amount of US government promises not at 120-130%, but several hundreds of percent.

Besides what was already baked into the cake as a result of debt (see above) and demographics (see: https://econimica.blogspot.com/?m=1), the cancellation of FX reserves of a major power will force the entire world to accelerate building alternatives to using the US petrodollar system (Bretton Woods II), see: https://plus2.credit-suisse.com/content ... Format=PDF or https://ourfiniteworld.com/2022/03/02/r ... rld-order/. The acceleration of an alternate system will compound the debt/demographics/tax revenue issues above faced by Western governments.

History shows that governments resort to war to distract away from an internal economic collapse and to provide justification from more government spending, see: https://www.myrmikan.com/pub/Myrmikan_R ... _03_09.pdf.

Besides the horrors of war, governments have shown that in order to protect the elite class in such times, civil liberties are stripped away, and population control becomes a primary focus of policy, see: https://www.futurescenarios.org/4-desce ... rown-tech/ and
https://holmgren.com.au/writing/pandemi ... -clothing/ and https://thephilosophicalsalon.com/a-sel ... imulation/ and https://thephilosophicalsalon.com/the-c ... pt-secret/ and https://thephilosophicalsalon.com/slavo ... -the-left/

As to why some of the above mentioned problems did not come to roost earlier is that advances in technology and government subsidies allowed for the shale revolution which forestalled energy depletion and boosted the USD. The easy gains from the shale revolution have now been realized (past tense).

These problems are global and whether China suffers more or less than the US is a question of relativity. The global value of nominal financial assets will be reconciled with the actual amount of real global assets that exist and for which these nominal assets must be exchanged, see: https://surplusenergyeconomics.wordpress.com/











All I want you to do is put these sunglasses on.

[giskard]

Predictions:

- CPI Inflation averages above 5% the entire year of 2022, it starts to create long-term psychological changes in the way people consume (spending their entire paycheck immediately, etc).
- 2 rate hikes in 2022
- Gold finally does what it's supposed to and goes up during this period of negative real interest rates
- SPY has a minor -10% correction
- The executive branch administration struggles to handle the inflation situation and they enact price controls. They blame it on "greedy capitalists". This causes further shortages and supply chain disruptions.
- Geopolitically, tensions continue to be high. Something happens with Taiwan or Hong Kong before or after the olympics in Feb.
- Oil continues to go up but starts to moderate when the stock market correction happens. Average US gas price will be over $4 / gallon by end of 2022.
- Corona is mostly over, but there is some national/international health crisis. This time it's compounded due to a shortage of hospital workers.

I'm just looking back at my predictions 6 months through:

- missed the stock marked being down 20% only said 10%
- misjudged how much hard inflation would hit and how much the fed would have to raise rates
- I was predicting a conflict but I said Taiwan! I should have said Ukraine as it turns out!
- Because the conflict is happening in Ukraine it's having a way bigger impact on fuel prices.
- I think I will hit the average inflation & gas price numbers very easily.
- I still think we are going to see price controls - maybe on gasoline (?). I do think the stock market tanking will impact enconomic numbers and oil / gas will stop accelerating higher soon.